ACCOUNTS - Final Accounts

An analysis of turnover by class of business is as follows:

Registered number: 11703378

SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

COMPANY INFORMATION

Directors	M A Welden
	R Robinson


Company secretary	J Robinson


Registered number	11703378


Registered office	14th Floor
	33 Cavendish Square
	London
	W1G 0PW


Independent auditors	Sumer Auditco Limited
	Chartered Accountants & Statutory Auditors
	14th Floor
	33 Cavendish Square
	London
	W1G 0PW

SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

CONTENTS

	Page
Group strategic report	1 - 2
Directors' report	3 - 4
Independent auditors' report	5 - 9
Consolidated statement of comprehensive income	10
Consolidated balance sheet	11 - 12
Company balance sheet	13
Consolidated statement of changes in equity	14 - 15
Company statement of changes in equity	16
Consolidated statement of cash flows	17 - 18
Consolidated analysis of net debt	19
Notes to the financial statements	20 - 43

SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

GROUP STRATEGIC REPORT

FOR THE YEAR ENDED 31 DECEMBER 2025

Introduction

The directors present their strategic report for the period ended 31 December 2025.

The principal activity of the Company during the year was that of a holding company.

In March 2025, the Company’s subsidiary, Silcoms II Limited acquired the trade and assets of Silcoms Limited and commenced trade. Details of this acquisition are included in Note 25. The rationale for the acquisition is to bring together core manufacturing businesses serving the aviation and aerospace businesses.

The principal activities of the Company’s main subsidiary undertakings are disclosed in Note 13 to these financial statements.

The Company's principal risk relates to the performance of its subsidiary undertakings.

Business review

Sales in the year were £18.6m, being an increase of £7.2m on the prior year. The Silcoms II business contributed £9.5m to this increase, the decrease from the group’s existing business was from major customers such as BAE systems and Rockford driven in part by the timing when new projects come onstream.

The Group’s commitment to research and development (“R&D”) has all been accounted for in the profit and loss, the R&D activity in the year focused on the company’s core capabilities using innovative solutions.

Principal risks and uncertainties

The risks to which the Group is exposed are identified and reviewed by the Board of Directors on a monthly basis. The previously identified risk of over-exposure to any significant customers has continued to be managed by adding several new customers across a range of platforms and type of work. The Group's shareholder loans and financing facilities are regularly reviewed.

The Group's financial instruments principally comprise of trade debtors, bank loans, trade creditors, cash at bank, asset based financing and shareholder loans. It is, and has been throughout the year under review, the company's policy that no trading in financial instruments shall be undertaken.

The main risk arising from the Group's financial instruments is liquidity, interest and credit risk. The Board reviews and agrees policies for managing each of these risks and they are summarised below. These policies have remained unchanged throughout the period.

Liquidity risk

The Group actively manages its working capital requirement to ensure it has sufficient liquid resources to meet the operating needs of the business.

Interest risk

The Group's interest rate exposure arises mainly from its interest-bearing borrowings. The Group monitors the financial risk of interest rate movements on a regular basis, and the impact rises would have on profitability while fixed rate borrowings expose the entity to fair value risk. The Group regularly reviews its funding arrangements to ensure they are competitive in the market place.

Foreign exchange risk

The Group's foreign exchange risk arises from sales in dollars, although this is only approximately 3% of total sales.

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SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

GROUP STRATEGIC REPORT (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2025

Credit risk

The recipients of all loans are subject to credit verification procedures by the Board. Debtors are reviewed on a regular basis and a provision is made for doubtful debts when necessary.

Financial key performance indicators

The Group maintains a tight control over both fixed and variable overheads. In addition, therefore to the monthly detailed cost reviews undertaken by Management, the Group monitors its performance by means of key performance indicators, Turnover and EBITDA are used.


					2025	2024
					£000	£000


Turnover	18,556	11,365
EBITDA pre-exceptional items	433	1,078

Although 2025 was a challenging year for the group, 2026 is seeing strong growth in the order book with a view to a return to profitability supported by further investment into the business by the shareholders.

This report was approved by the board on 15 October 2026 and signed on its behalf.

M A Welden

Director

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SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

DIRECTORS' REPORT

FOR THE YEAR ENDED 31 DECEMBER 2025

The directors present their report and the financial statements for the year ended 31 December 2025.

Directors' responsibilities statement

The directors are responsible for preparing the Group strategic report, the Directors' report and the consolidated financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period.

In preparing these financial statements, the directors are required to:

∙select suitable accounting policies for the Group's financial statements and then apply them consistently;

∙make judgements and accounting estimates that are reasonable and prudent;

∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Results and dividends

The loss for the year, after taxation and minority interests, amounted to £588,129 (2024 - profit 356,946).

Directors

The directors who served during the year were:

M A Welden

R Robinson

Matters covered in the strategic report

The directors have chosen to disclose information on the following, required by the Companies Act to be included in the Director's Report, within the Strategic Report, found on pages 1 and 2.

- Information on financial instruments, financial risk management and policies and;

- Information regarding future developments of the business.

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SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

DIRECTORS' REPORT (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2025

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:

∙so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and

∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.

Auditors

The auditors, Sumer Auditco Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 15 October 2026 and signed on its behalf.

M A Welden

Director

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SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

Opinion

We have audited the financial statements of Sovereign Precision Engineering Group Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2025, which comprise the Consolidated statement of comprehensive income, the Consolidated balance sheet, the Company balance sheet, the Consolidated statement of cash flows, the Consolidated statement of changes in equity, the Company statement of changes in equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

∙give a true and fair view of the state of the Group's and of the parent Company's affairs as at 31 December 2025 and of the Group's loss for the year then ended;

∙have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

∙have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or the parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

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SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SOVEREIGN PRECISION ENGINEERING GROUP LIMITED (CONTINUED)

Other information

The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinion on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

∙the information given in the Group strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

∙the Group strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group strategic report or the Directors' report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

∙adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or

∙the parent Company financial statements are not in agreement with the accounting records and returns; or

∙certain disclosures of directors' remuneration specified by law are not made; or

∙we have not received all the information and explanations we require for our audit.

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SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SOVEREIGN PRECISION ENGINEERING GROUP LIMITED (CONTINUED)

Responsibilities of directors

As explained more fully in the Directors' responsibilities statement set out on page 3, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Group's and the parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so.

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SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SOVEREIGN PRECISION ENGINEERING GROUP LIMITED (CONTINUED)

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

In order to identify and assess the risks of material misstatements, including fraud and non-compliance with laws and regulations that could be expected to have a material impact on the financial statements, we have considered:
• the results of our enquiries of management and those charged with governance of their assessment of
the risks of fraud and irregularities;
• the nature of the company, including its management structure and control systems, including the opportunity for management to override such controls;
• management’s incentives and opportunities for fraudulent manipulation of the financial statements including the company’s remuneration and bonus policies and performance targets; and
• the industry and environment in which it operates.

We also considered UK tax and pension legislation and laws and regulations relating to employment and the preparation and presentation of the financial statements such as the Companies Act 2006.

Based on this understanding we identified the following matters as being of significance to the entity:

•laws and regulations considered to have a direct effect on the financial statements including UK financial reporting standards, Company Law, tax and pension legislation and distributable profits legislation;
• the timing of the recognition of commercial income;
• management bias in selecting accounting policies and determining estimates;
• inappropriate journal entries;
• recoverability of debtors; and
• the requirement to include provisions against aged stock and the amount of any such provision.

We communicated the outcomes of these discussions and enquiries, as well as consideration as to where and how fraud may occur in the entity, to all engagement team members.

Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised:

•enquiries of management and those charged with governance as to whether the entity complies with such
laws and regulations;
• enquiries with the same concerning any actual or potential litigation or claims;
• discussion with the same regarding any known or suspected instances of non-compliance with laws and regulation and fraud;
• inspection of relevant legal correspondence;
• assessment of matters reported to management and the result of the subsequent investigation;
• obtaining an understanding of the relevant controls and testing their operation during the period;
• obtaining an understanding of the policies and controls over the recognition of income and testing their implementation during the year;

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SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SOVEREIGN PRECISION ENGINEERING GROUP LIMITED (CONTINUED)

• challenging assumptions made by management in their specific accounting policies and estimates, in particular in relation to carrying value of stock.
• identifying and testing journal entries, in particular any journal entries posted with unusual account combinations or crediting revenue or cash;
• accessing the recovery of debtors in the period since the balance sheet date and challenging
assumptions made by management regarding the recovery of balances which remain outstanding;
• reviewing the financial statements for compliance with the relevant disclosure requirements;
• performing analytical procedures to identify any unusual or unexpected relationships or unexpected movements in account balances which may be indicative of fraud;
• reviewing the minutes of Board meetings and correspondence with HMRC;
• evaluating the underlying business reasons for any unusual transactions; and
• considering the implementation of controls during the year.

No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' report.

Use of our report

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.

Andrew Hill (Senior statutory auditor)

for and on behalf of

Sumer Auditco Limited

Chartered Accountants

Statutory Auditors

14th Floor

33 Cavendish Square

London

W1G 0PW

15 October 2026

Page 9

SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2025

	2025	2024
Note	£	£


Turnover	4	18,556,466	11,365,940
Cost of sales		(11,286,816)	(7,282,638)
Gross profit		7,269,650	4,083,302
Distribution costs		315,934	-
Administrative expenses		(8,051,392)	(3,468,704)
Exceptional administrative expenses		(28,112)	(43,966)
Other operating income		65,991	-
Operating (loss)/profit	6	(427,929)	570,632
Interest payable and similar expenses	9	(699,575)	(498,686)
(Loss)/profit before taxation		(1,127,504)	71,946
Tax on (loss)/profit	10	539,375	285,000
(Loss)/profit for the financial year		(588,129)	356,946


Unrealised surplus on revaluation of tangible fixed assets	63,038	-
Deferred tax on revaluation	(15,760)	-
Other comprehensive income for the year	47,278	-
Total comprehensive income for the year	(540,851)	356,946

(Loss)/profit for the year attributable to:
Non-controlling interests	77,436	-
Owners of the Company	(665,565)	356,946
	(588,129)	356,946

Total comprehensive income for the year attributable to:
Non-controlling interests	82,164	-
Owners of the Company	(623,015)	356,946
	(540,851)	356,946

The notes on pages 20 to 43 form part of these financial statements.

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SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

REGISTERED NUMBER: 11703378

CONSOLIDATED BALANCE SHEET

AS AT 31 DECEMBER 2025

		2025		2024
Note		£		£

Fixed assets
Intangible assets	11		(81,855)		-
Tangible assets	12		2,966,412		1,885,636
			2,884,557		1,885,636
Current assets
Stocks	14	5,104,076		3,753,327
Debtors: amounts falling due within one year	15	5,136,716		3,999,491
Cash at bank and in hand	16	285,875		53,344
		10,526,667		7,806,162
Creditors: amounts falling due within one year	17	(6,821,068)		(6,365,679)
Net current assets			3,705,599		1,440,483
Total assets less current liabilities			6,590,156		3,326,119
Creditors: amounts falling due after more than one year	18		(4,985,666)		(1,296,538)
Deferred taxation	21	(15,760)		-
Other provisions	22	(100,000)		-
			(115,760)		-
Net assets			1,488,730		2,029,581

Capital and reserves
Called up share capital	24	100	100
Revaluation reserve	25	246,005	198,727
Profit and loss account	25	1,160,461	1,830,754
Equity attributable to owners of the parent Company		1,406,566	2,029,581
Non-controlling interests		82,164	-
		1,488,730	2,029,581

The financial statements were approved and authorised for issue by the board and were signed on its behalf on 15 October 2026.

M A Welden

Director

The notes on pages 20 to 43 form part of these financial statements.

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SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

REGISTERED NUMBER: 11703378

CONSOLIDATED BALANCE SHEET (CONTINUED)

AS AT 31 DECEMBER 2025

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SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

REGISTERED NUMBER: 11703378

COMPANY BALANCE SHEET

AS AT 31 DECEMBER 2025

		2025		2024
Note		£		£

Fixed assets
Investments	13		81		80
			81		80
Current assets
Debtors: amounts falling due within one year	15	20		20
		20		20
Creditors: amounts falling due within one year	17	(1)		-
Net current assets			19		20
Total assets less current liabilities			100		100


Net assets			100		100

Capital and reserves
Called up share capital	24	100	100
		100	100

The financial statements were approved and authorised for issue by the board and were signed on its behalf on 15 October 2026.

M A Welden

Director

The notes on pages 20 to 43 form part of these financial statements.

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SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2025

	Called up share capital	Revaluation reserve	Profit and loss account	Equity attributable to owners of parent Company	Non-controlling interests	Total equity
	£	£	£	£	£	£
At 1 January 2025	100	198,727	1,830,754	2,029,581	-	2,029,581
Comprehensive income for the year
Loss for the year	-	-	(665,565)	(665,565)	77,436	(588,129)
Surplus on revaluation of freehold property	-	47,278	-	47,278	-	47,278
Transfer	-	-	(4,728)	(4,728)	4,728	-
Total comprehensive income for the year	-	47,278	(670,293)	(623,015)	82,164	(540,851)
At 31 December 2025	100	246,005	1,160,461	1,406,566	82,164	1,488,730

The notes on pages 20 to 43 form part of these financial statements.

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SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2024

	Called up share capital	Revaluation reserve	Profit and loss account	Equity attributable to owners of parent Company	Non-controlling interests	Total equity
	£	£	£	£	£	£
At 1 January 2024	100	293,005	1,183,071	1,476,176	370,396	1,846,572
Comprehensive income for the year
Profit for the year	-	-	356,946	356,946	-	356,946
Total comprehensive income for the year	-	-	356,946	356,946	-	356,946
Contributions by and distributions to owners
Revaluation of fixed assets in the year	-	(173,937)	-	(173,937)	-	(173,937)
Transfer of NCI reserve	-	79,659	290,737	370,396	(370,396)	-
Total transactions with owners	-	(94,278)	290,737	196,459	(370,396)	(173,937)
At 31 December 2024	100	198,727	1,830,754	2,029,581	-	2,029,581

The notes on pages 20 to 43 form part of these financial statements.

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		SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2025

	Called up share capital	Total equity
	£	£

At 1 January 2024	100	100

Profit for the year	-	-
Total comprehensive income for the year	-	-

At 1 January 2025	100	100

Profit for the year	-	-
Total comprehensive income for the year	-	-
At 31 December 2025	100	100

The notes on pages 20 to 43 form part of these financial statements.

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SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2025

			2025	2024
			£	£

Cash flows from operating activities
(Loss)/profit for the financial year	(588,129)	356,946
Adjustments for:
Amortisation of intangible assets	(315,934)	-
Depreciation of tangible assets	516,911	463,094
Gain on disposal of tangible assets	(7,500)	(9,891)
Interest paid	699,575	498,868
Taxation charge	(539,375)	(285,000)
Decrease/(increase) in stocks	782,565	(180,665)
(Increase) in debtors	(1,044,311)	(1,172,345)
(Decrease) in creditors	(248,423)	(60,623)
Corporation tax received	446,461	-
Net cash generated from operating activities	(298,160)	(389,616)

Cash flows from investing activities
Purchase of tangible fixed assets	(261,827)	(49,385)
Sale of tangible fixed assets	37,500	9,891
Acquisition of trade and assets	(1,000,091)	-
Acquisition of property	(806,962)	-
HP interest paid	(74,561)	(74,478)
Net cash from investing activities	(2,105,941)	(113,972)
Cash flows from financing activities
New loans	4,504,153	-
Repayment of other loans	(535,307)	(183,601)
Repayment of/new finance leases	(198,704)	(265,469)
Movements on invoice discounting	(695,348)	1,338,645
Interest paid	(438,162)	(402,768)
Net cash used in financing activities	2,636,632	486,807
Net increase/(decrease) in cash and cash equivalents	232,531	(16,781)
Cash and cash equivalents at beginning of year	53,344	70,125
Cash and cash equivalents at the end of year	285,875	53,344

Cash and cash equivalents at the end of year comprise:
Cash at bank and in hand	285,875	53,344

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SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

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SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

CONSOLIDATED ANALYSIS OF NET DEBT

FOR THE YEAR ENDED 31 DECEMBER 2025


At 1 January 2025	Cash flows	Additions in the year	At 31 December 2025
£	£	£	£

Cash at bank and in hand	53,344	232,531	-	285,875
Debt due after 1 year	(897,653)	379,751	(4,084,057)	(4,601,959)
Debt due within 1 year	(3,289,197)	850,904	(420,096)	(2,858,389)
Finance leases	(796,343)	198,704	-	(597,639)
	(4,929,849)	1,661,890	(4,504,153)	(7,772,112)

The notes on pages 20 to 43 form part of these financial statements.

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SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

1.	General information

The is a private company limited by shares and is incorporated in England and Wales. The registered office address is 14th Floor, 33 Cavendish Square, London, W1G 0PW. The principal trading address of the group is Stony Lane, Christchurch, Dorset, BH23 1EX. On 5 October 2026 the company changed its name from Breal Capital (Beagle) Limited to Sovereign Precision Engineering Group Limited.

2.Accounting policies

2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies (see note 3).

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of comprehensive income in these financial statements.

In the year to 31 December 2025, the parent company did not trade and the profit & loss for the period was £NIL. (2024: £NIL)

Parent Company disclosure exemptions

In preparing the separate financial statements of the parent Company, advantage has been taken of the following disclosure exemptions available in FRS 102:

• No Statement of Cash Flows has been presented for the parent Company;

• Disclosures in respect of the parent Company's financial instruments have not been presented as equivalent disclosures have been provided in respect of the Group as a whole; and

• No disclosures have been given for the aggregate remuneration of the key management personnel of the parent Company as their remuneration is included in the totals for the Group as a whole.

The following principal accounting policies have been applied:

2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.

The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance sheet, the acquirees identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.

Page 20

SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

2.Accounting policies (continued)

2.3

Going concern

After reviewing the Group’s forecast and projections and based on the continued support of the Group’s principal lenders, the directors have a reasonable expectation that the Company and Group has adequate resources to continue in operational existence for the foreseeable future. The Company and Group therefore continues to adopt the going concern basis in preparing the financial statements.

2.4

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

2.5

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:

∙the Group has transferred the significant risks and rewards of ownership to the buyer;

∙the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

∙the amount of revenue can be measured reliably;

∙it is probable that the Group will receive the consideration due under the transaction; and

∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Page 21

SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

2.Accounting policies (continued)

2.5

Revenue (continued)

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:

∙the amount of revenue can be measured reliably;

∙it is probable that the Group will receive the consideration due under the contract;

∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and

∙the costs incurred and the costs to complete the contract can be measured reliably.

2.6

Operating leases: the Group as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

2.7

Leased assets: the Group as lessee

Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the company. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to profit or loss so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.

2.8

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

2.9

Borrowing costs

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

Page 22

SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

2.Accounting policies (continued)

2.10

Pensions

Defined contribution pension plan

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the Group in independently administered funds.

2.11

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company and the Group operate and generate income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:

∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;

∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and

∙Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

2.12

Exceptional items

Exceptional items are transactions that fall within the ordinary activities of the Group but are presented separately due to their size or incidence.

Page 23

SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

2.Accounting policies (continued)

2.13

Intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible
assets are measured at cost less any accumulated amortisation and any accumulated impairment
losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life
cannot be made, the useful life shall not exceed ten years.

The amortisation rate of the goodwill recognised on acquisition of the trade and assets of Silcoms
Limited is attached to the underlying nature of the assets and liabilities acquired.

2.14

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Freehold property	-	3% straight-line
Short-term leasehold property	-	Over the life of the lease
Plant and machinery	-	10% to 25% straight-line
Fixtures and fittings	-	10% straight-line
Office equipment	-	25% straight-line
Other fixed assets	-	20% to 100% straight-line

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

2.15

Revaluation of tangible fixed assets

Plant and machinery are carried at fair value less any subsequent accumulated depreciation and impairment losses. Revaluations are undertaken with sufficient regularity to ensure the carrying amount does not differ materially from that which would be determined using fair value at the balance sheet date.

Fair values are determined from market based evidence normally undertaken by professionally qualified valuers.

Revaluation gains and losses are recognised in other comprehensive income unless losses exceed the previously recognised gains or reflect a clear consumption of economic benefits, in which case the excess losses are recognised in profit or loss.

Page 24

SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

2.Accounting policies (continued)

2.16

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

2.17

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a standard costing basis. Work in progress and finished goods include labour and attributable overheads

At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

2.18

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

2.19

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours.

In the Consolidated statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.

2.20

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

2.21

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.

Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.

Increases in provisions are generally charged as an expense to profit or loss.

2.22

Financial instruments

The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the Group's Balance sheet when the Group becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements,

Page 25

SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

2.Accounting policies (continued)

2.22

Financial instruments (continued)

when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.

Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments.

Other financial assets

Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.

Impairment of financial assets

At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.

Basic financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after the deduction of all its liabilities.

Basic financial liabilities, which include trade and other creditors, bank loans, other loans and loans due to fellow group companies are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently

Page 26

SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

2.Accounting policies (continued)

2.22

Financial instruments (continued)

measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest, discounting is omitted where the effect of discounting is immaterial.

Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.

Trade creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade creditors are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

Other financial instruments

Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.

Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.

Derecognition of financial assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Group transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Group will continue to recognise the value of the portion of the risks and rewards retained.

Derecognition of financial liabilities

Financial liabilities are derecognised when the Group's contractual obligations expire or are discharged or cancelled.

Page 27

SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

3.	Judgements in applying accounting policies and key sources of estimation uncertainty

Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Group makes estimates and assumptions concerning the future. Actual results may differ from these estimates. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Stock provision

Management has implemented specific provisions against slow-moving inventories based on their experience of the Group's stock holding and the period of time that an inventory line has not moved. The provision is offset against the stock balance.

Tangible fixed assets

Tangible fixed assets, other than plant and machinery, are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.

Plant and machinery are held on a depreciated valuation basis, which is assessed by management at each balance sheet date with reference to recent professional valuations.

Page 28

SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

Metallics	8,392,291	11,121,637
Composites	706,214	244,303
Commissions received	900,000	-
Chains sales	1,384,208	-
Aero engine part sales	7,173,753	-
	18,556,466	11,365,940

Analysis of turnover by country of destination:

					2025	2024
					£	£

United Kingdom	17,745,023	11,122,686
Rest of Europe	239,384	3,372
Rest of the world	572,059	239,882
	18,556,466	11,365,940

5.	Exceptional items
		2025	2024
		£	£

Staff redundancy and settlement costs

28,112

43,966

Page 29

SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

Research & development charged as an expense	3,595,830	2,974,430
Exchange differences	86,590	5,842
Other operating lease rentals	454,832	388,527
Depreciation	516,911	465,094
Amortisation of goodwill	315,934	-
Gain on disposal of tangible assets	(7,500)	(9,891)

Fees payable to the Company's auditors for the audit of the consolidated and parent Company's financial statements	6,500	6,500
Audit-related assurance services	50,500	30,775
All other services	28,429	6,372

Page 30

SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

8.	Employees
	Staff costs, including directors' remuneration, were as follows:

		Group	Group
		2025	2024
		£	£


Wages and salaries	8,105,515	5,160,632
Social security costs	928,376	514,213
Cost of defined contribution scheme	281,122	159,220
	9,315,013	5,834,065

The average monthly number of employees, including the directors, during the year was as follows:

	2025	2024
	No.	No.

Directors	1	1
Sales, administrative and distribution	30	14
Manufacturing	171	104

	202	119

Key management personnel remuneration during the year was £106,238 (2024: £160,975).

9.	Interest payable and similar expenses
		2025	2024
		£	£

Bank interest payable	86,658	27,212
Other loan interest payable	225,007	126,510
Finance leases and hire purchase contracts	100,532	74,865
Other interest payable	287,378	270,099
	699,575	498,686

Page 31

SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

Corporation tax
Current tax on profits for the year	(539,375)	(285,000)


	Taxation credit on profit on ordinary activities	(539,375)	(285,000)

(Loss)/profit on ordinary activities before tax

(1,127,504)

71,946

(Loss)/profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2024 - 25%)	(281,876)	17,987
Effects of:
Expenses not deductible for tax purposes, other than goodwill amortisation and impairment	15,474	1,650
Capital allowances for year in excess of depreciation	(111,305)	-
Short-term timing difference leading to an increase (decrease) in taxation	62,691	(82,145)
Utilisation of R&D tax credits	(539,375)	(285,000)
Additional deduction from R&D expenditure	-	(639,503)
Surrender of tax losses for R&D tax credit refund	396,000	702,011
Profit on disposal of assets	(2,000)	-
Negative goodwill amortisation	(78,984)	-
Total tax charge for the year	(539,375)	(285,000)

Factors that may affect future tax charges

The Group has estimated losses of £4.6m (2024: £3.8m) to carry forward against future profits. These losses in part are offset against the Group’s deferred tax liability arising from accelerated capital allowances. The balance of any losses available to offset against future trading profits are estimated at £3.3m (2024: £1.2m). No deferred tax asset has been recognised in respect of the losses arising due to the uncertainty as to when the asset will be recovered.

Page 32

SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

11.	Intangible assets
	Group and Company

	Goodwill	Negative goodwill	Total
	£	£	£
Cost
At 1 January 2025	774,074	-	774,074
Additions	-	(397,789)	(397,789)
At 31 December 2025	774,074	397,789	1,171,863
Amortisation
At 1 January 2025	(774,074)	-	(774,074)
Charge for the year on owned assets	-	(315,934)	(315,934)
At 31 December 2025	(774,074)	(315,934)	(1,090,008)
Net book value
At 31 December 2025	-	(81,855)	(81,855)
At 31 December 2024	-	-	-

Page 33

SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

12.	Tangible fixed assets
	Group

	Freehold property	Short-term leasehold property	Plant and machinery	Fixtures and fittings	Office equipment
	£	£	£	£	£
Cost or valuation
At 1 January 2025	-	-	2,384,253	468,389	-
Additions	806,962	40,914	442,954	172,693	27,214
Disposals	-	-	(30,000)	-	-
Revaluations	63,038	-	-	-	-
At 31 December 2025	870,000	40,914	2,797,207	641,082	27,214
Depreciation
At 1 January 2025	-	-	841,787	295,331	-
Charge for the year on owned assets	7,250	-	367,088	55,249	7,029
Disposals	-	-	(30,000)	-	-
At 31 December 2025	7,250	-	1,178,875	350,580	7,029
Net book value
At 31 December 2025	862,750	40,914	1,618,332	290,502	20,185
At 31 December 2024	-	-	1,542,466	173,058	-

Page 34

SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

12.Tangible fixed assets (continued)

	Computer equipment	Other fixed assets	Total
	£	£	£
Cost or valuation
At 1 January 2025	465,765	246,112	3,564,519
Additions	4,838	39,074	1,534,649
Disposals	-	-	(30,000)
Revaluations	-	-	63,038
At 31 December 2025	470,603	285,186	5,132,206
Depreciation
At 1 January 2025	368,957	172,808	1,678,883
Charge for the year on owned assets	32,428	47,867	516,911
Disposals	-	-	(30,000)
At 31 December 2025	401,385	220,675	2,165,794
Net book value
At 31 December 2025	69,218	64,511	2,966,412
At 31 December 2024	96,808	73,304	1,885,636

Plant and machinery held under finance lease was subject to a revaluation of £1,291,500 on 28 April 2025 by Hilco Appraisal Limited, professional valuation specialists which was reflected in the 2024 accounts.

The directors consider the valuations to be appropriate, at the balance sheet date.

The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:
	2025	2024
	£	£


	Plant and machinery	784,676	1,015,348

Page 35

SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

12.Tangible fixed assets (continued)

Freehold land and buildings were also subject to a revaluation of £870,000 on 26 February 2025 by Landwood Group, chartered surveyors.

The directors consider the valuations to be appropriate, at the balance sheet date.

If the land and buildings had not been included at valuation they would have been included under the historical cost convention as follows:

.
		2025
		£


	Cost	806,962
	Accumulated depreciation	(6,725)
		800,237

13.	Fixed asset investments

	Company

		Investments in subsidiary companies
		£
	Cost
	At 1 January 2025	80
	Additions	1
	At 31 December 2025	81

Page 36

SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

Subsidiary undertakings
The following were subsidiary undertakings of the Company:
Name	Principal activity	Class of shares	Holding

Beagle Group Limited	Holding company	Ordinary	100%
Beagle Technology Group Limited*	Manufacturing of aerospace metallic and composite assemblies and components.	Ordinary	100%
Qbic Technologies Limited**	Software development and engineering design activities.	Ordinary	100%
BTG Design Services Limited**	Dormant	Ordinary	100%
Beagle Aerospace Limited**	Dormant	Ordinary	100%
Beagle Composites Limited**	Dormant	Ordinary	100%
Manky Dog Limited**	Dormant	Ordinary	100%
Beagle MRO Limited**	Dormant	Ordinary	100%
Beagle Precision Limited**	Dormant	Ordinary	100%
Beagle Treatments Limited**	Dormant	Ordinary	100%
Beagle Aircraft Limited**	Dormant	Ordinary	100%
Silcoms II Limited	Manufacturing of aero-engineering components, chains and other general machined components.	Ordinary	90%

*shares held via Beagle Group Limited
** shares held via Beagle Technology Group Limited

All of the above companies are registered in England and Wales, and all have the same registered office address at Stony Lane, Christchurch, Dorset, BH23 1EX.

14.	Stocks
		Group	Group
		2025	2024
		£	£

Raw materials and consumables	2,731,224	2,365,111
Work in progress	2,069,461	1,038,833
Finished goods and goods for resale	303,391	349,383
	5,104,076	3,753,327

15.

Debtors

Group	Group	Company	Company
2025	2024	2025	2024
£	£	£	£

Page 37

SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

15.Debtors (continued)


Trade debtors	4,197,745	3,301,719	-	-
Amounts owed by group undertakings	-	-	1	1
Other debtors	11,100	2,950	19	19
Prepayments and accrued income	389,956	249,822	-	-
Tax recoverable	537,915	445,000	-	-
	5,136,716	3,999,491	20	20

16.	Cash and cash equivalents
		Group	Group
		2025	2024
		£	£

	Cash at bank and in hand	285,875	53,344

17.	Creditors: Amounts falling due within one year
		Group	Group	Company	Company
		2025	2024	2025	2024
		£	£	£	£

Bank loans	2,858,389	3,289,197	-	-
Trade creditors	1,238,121	843,849	-	-
Other taxation and social security	890,759	589,024	-	-
Obligations under finance lease and hire purchase contracts	213,932	397,458	-	-
Other creditors	517,195	176,269	1	-
Accruals and deferred income	1,102,672	1,069,882	-	-
	6,821,068	6,365,679	1	-

Credit facilities, other loans and loans within other creditors are secured by way of fixed and floating charges over the assets of the company, totalling £2,858,389 (2024: £3,289,197).

Finance lease and hire purchase creditors are secured against the assets to which they relate.

Page 38

SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

18.	Creditors: Amounts falling due after more than one year
		Group	Group
		2025	2024
		£	£

Bank loans	2,214,033	-
Other loans	326,117	-
Net obligations under finance leases and hire purchase contracts	383,707	398,885
Other creditors	2,061,809	897,653
	4,985,666	1,296,538

Credit facilities, other loans and loans within other creditors are secured by way of fixed and floating charges over the assets of the company, totalling £4,601,959 (2024: £897,653).

19.	Loans
	Analysis of the maturity of loans is given below:
		Group	Group
		2025	2024
		£	£

Amounts falling due within one year
Bank loans	2,858,389	3,289,197
Amounts falling due 1-2 years
Bank loans	1,730,430	-
Other loans	326,117	-
Amounts falling due 2-5 years
Bank loans	483,603	-

	5,398,539	3,289,197

20.	Hire purchase and finance leases
	Payments under finance lease arrangements fall due as follows:
		Group	Group
		2025	2024
		£	£

Within one year	214,653	397,458
Between 1-5 years	382,986	398,885
	597,639	796,343

Page 39

SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

21.	Deferred taxation
	Group

		2025
		£

	Charged to other comprehensive income	(15,760)
	At end of year	(15,760)

	The deferred taxation balance is made up as follows:
		Group
		2025
		£

	Deferred tax on revalued assets	(15,760)
		(15,760)

22.	Provisions
	Group


		£

	Charged to profit or loss	100,000
	At 31 December 2025	100,000

Page 40

SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

23.	Business combinations

Acquisition of the trade and assets of Silcoms Limited by Silcoms II Limited on 4th March 2025.

Acquisition of Silcoms Limited
Recognised amounts of identifiable assets acquired and liabilities assumed
	Book value	Fair value adjustments	Fair value
	£	£	£

Fixed Assets
Tangible	465,860	-	465,860
	465,860	-	465,860
Current Assets
Stocks	2,669,193	(535,879)	2,133,314
Total Assets	3,135,053	(535,879)	2,599,174
Creditors
Due within one year	(901,294)	-	(901,294)
Total Identifiable net assets	2,233,759	(535,879)	1,697,880


	Goodwill	(397,789)
	Total purchase consideration	1,300,091

	Consideration
					£


	Cash	917,298
	Deferred consideration	300,000
	Directly attributable costs	82,793
	Total purchase consideration	1,300,091

Page 41

SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

23.Business combinations (continued)

	Cash outflow on acquisition
					£


	Purchase consideration settled in cash, as above	1,217,298
	Directly attributable costs	82,793
		1,300,091
	Net cash outflow on acquisition	1,300,091

24.	Share capital
		2025	2024
		£	£

Allotted, called up and fully paid

10,000 (2024 - 10,000) Ordinary shares of £0.01 each	100	100

There is a single class of ordinary shares. There are no restrictions on distribution of dividends and the repayment of capital.

25.

Reserves

Revaluation reserve

Being cumulative gains on tangible fixed assets held at valuation.

Profit and loss account

Being cumulative profits and losses from activities, together with any capital contributions.

26.	Pension commitments

The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £281,122 (2024 - £159,220). Contributions totalling £46,626 (2024 - £34,397) were payable to the fund at the balance sheet date and are included in creditors.

Page 42

SOVEREIGN PRECISION ENGINEERING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

27.	Commitments under operating leases
	At 31 December 2025 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
		Group	Group
		2025	2024
		£	£

Not later than 1 year	415,499	389,987
Later than 1 year and not later than 5 years	2,152,931	2,075,398
Later than 5 years	2,337,500	2,762,500
	4,905,930	5,227,885

28.

Related party transactions

At the balance sheet date, included in creditors due in more than one year was an amount of £2,387,926 (2024: £897,653) due from shareholders of the Group and entities in which directors of the Group have a material interest.

At the balance sheet date, included in creditors, due in less than one year . was an amount of £24,890 (2024: £129,389) due to shareholders of the group and entities in which directors of the company have a material interest.

Interest on the above loans was charged at 10% per annum and the charge for the year was £1,054,242 (2024: £96,100) remains unpaid at the balance sheet date.

Page 43